When seven insurers speak as one, doctors better listen

Q What's the initial focus of MedUnite?

A We'll focus on administrative transactions—eligibility, benefits, referrals, claims submission, and claims status. We'll want to make sure that transactions don't fall into a black hole. Physicians are always asking, "I sent this in, where did it go? Was it held up for review or denied? Why? Was it approved? When do I get paid?" We'll aim to make that information readily available and provide a method of correcting problems that arise.

Integrating the basic processes in the administrative area sets up the platform to do a lot of other things on the clinical side. But the administrative costs are large enough that they need to be focused on first. There are 30 billion transactions annually, costing between $250 and $300 billion. There's a tremendous opportunity for savings.

Q Will you give other connectivity vendors access to the system?

A Absolutely. The key is to have an open system that's available to any physician office through the Internet. It will be available not only to a doctor who wants to use MedUnite exclusively, but also to a physician who wants to use his own practice management system to reach MedUnite. For example, doctors could use our claims edits and feedback on claims status and integrate that information with whatever internal controls they have in their offices.

Q What about connectivity vendors that are working to get doctors' offices online with payers, such as WebMD, NaviMedix, TriZetto, and Passport? Will your system be open to the doctors who sign up with those services?

A The system will be open. Take NaviMedix, which has a good-quality system. Its principal approach is to work with a specific payer that has a strong market share and make that connectivity available to the physicians in a given area. But it doesn't provide online connections with all the other plans there. Physicians who wanted connectivity with all the local plans would be able to plug into MedUnite. We have seven plans, and we're working with other insurers to develop a broad range of services that will enable physician offices to deal with most of their payers.

Q How does proprietary electronic data interchange—the primary way that doctors now transmit claims online—fit into this equation?

A EDI's going to be around for a long time. There's going to be a transition to Internet traffic, but some things are going to remain on EDI. A lot of smaller providers use billing services that rely on the EDI interface. And a lot of clearinghouses provide capability for any provider to connect with plans via EDI. You have slow adoption curves for any new technology, and if something is working, there's a tendency not to want to change it. Or if you do change it, you do it incrementally. So we'll have to be able to handle EDI, and we're working on relationships with clearinghouses that will accommodate that need.

On the other hand, EDI has severe limitations. It can do a good job with the edit rules of an insurance company, but it can't handle questions like: "Where do I stand with my deductible?" "What particular benefit am I exercising?" or "Have I passed the allowable number of mental health visits?" From a physician's or an office staffer's perspective, you'd like answers to those questions while patients are still in the office, so you can collect the copay or handle the billing smoothly.

Q It often takes a clearinghouse more than 24 hours to edit a claim and tell an office that something's wrong or missing. In contrast, some Internet vendors can now do edits and give feedback in real time. Will MedUnite have that capability?

A Yes.

Q Will MedUnite focus on connectivity with practice management systems, and if so, what will you do about existing practice management software that isn't designed to connect with the Web?

A The majority of the IDX and Medical Manager systems are already Web-enabled, so a reasonably large percentage of offices could get to the Internet through their practice management systems. But if 40 percent of offices don't have that capability, that's 300,000 doctors, which is still a big number. How do we get around that?

One thing we can do is install an Internet service provider link and the necessary connectivity in physician offices if they want to do online transactions separately from their billing system. If they need to upgrade their computer to combine their practice management system with Internet connectivity on the same desktop, we could work with them on that.

Q Will the connectivity you provide be seamless from the perspective of the physician's office? Could you just put in a patient's name, ID number, and date of birth and be sure the transaction or query would go to the right plan?

A Assuming that the privacy rules for electronic transactions wouldn't be violated, you could just put the transaction in, and we'd find the right place for it and pass it on.

Q Where and when will MedUnite's new system be tested?

A In California and the New York-New Jersey-Connecticut area. Those tests will begin in February, and we'll be rolling our system out nationally in June or July.

Q Who's going to pay for all of this?

A We're working through the pricing right now. Physicians will pay subscription fees for using our services. For insurers, the charges will be on a per-transaction basis.

Q If you offer access to other vendors that are charging doctors a subscription fee, and you tack on another fee, how can doctors afford to pay both? You may have something to offer that other vendors don't, but they may have something you don't, if they connect to plans that don't belong to your consortium or aren't MedUnite customers.

A I think we'll have a lot more connectivity than any other company in the country. I do have a cost for providing this service, and it's more expensive than what our competitors are offering. But they shouldn't tell me I shouldn't charge a fair price for a very complete service.

I know physicians are being charged a lot by practice management software vendors and others. In some cases, they're being charged for the use of old edit rules, or for modules that are obsolete. Our goal is to provide real-time edits and real-time information that's dynamic and accurate.

Q But might not doctors feel they're being charged so much by multiple vendors that it's not worthwhile? Maybe they'll just stick with their current system.

A Well, they could. They could forgo the opportunity to make sure their eligibility situation is correct, to get paid faster, and to get immediate feedback on any errors in their claims. So they'd be forgoing an opportunity to improve their cash flow and reimbursement.

The question is, are those compelling reasons to want to connect online to the commercial payers—the ability to know where everything stands and get paid faster? I believe they are, based on our conversations with physicians.

Many physician offices today use workaround solutions that don't necessarily make sense. If a claim doesn't get paid the next day, for instance, they submit another one that looks just like it. This increases costs for everybody. Also, the way a claim is adjudicated and the resulting payment may not be the same as what appears in the physician's practice management system. The result is a huge reconciliation problem that's frustrating, time-consuming, and unnecessary. With the right electronic linkage, the data in the practice management system would be accurate and complete.

In addition, if the office had an electronic linkage to the claims status, and the system could show when the remittance would be coming, they'd be able to do an accurate cash flow forecast through the practice management system. And it wouldn't have to be reconciled every month and drive people nuts.

Q Is real-time claims adjudication a possibility?

A Definitely. The question is, what pace of change can payers handle? Some insurance systems are more readily adaptable than others. But there's no technical reason it can't be done. The problem is that most systems used by payers today are batch-oriented, as opposed to online-transaction-oriented. But if a plan's system could respond to a transaction in seconds and provide an answer for 90 percent of the claims submitted, that would be an enormous advantage.

Can you adjudicate all claims that way? No. Some of them require research. But the technology is there to do a lot of them, and it's being field-tested as we speak.

On the other hand, if we can provide an answer on a claim by tomorrow, that's a huge step forward. So let's get everybody responding within 24 hours, instead of in two to four weeks. From there, we can move up to real time.

Ken Terry. When seven insurers speak as one, doctors better listen.

Medical Economics

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